Wayne State University
Financial Report
September 30, 2005
Wayne State University
Contents
Independent Auditor’s Report
1
Financial Statements
Management’s Discussion and Analysis - Unaudited
2-18
Balance Sheets
19
Statements of Revenues, Expenses and Changes in Net Assets
20
Statements of Cash Flows
21
Notes to Financial Statements
22-40
Additional Information
41
Report on Supplemental Information
42
Combining Balance Sheet – September 30, 2005
with comparative totals for September 30, 2004
Combining Statement of Revenues, Expenses, Transfers and
Changes in Net Assets for the year ended September 30, 2005
with comparative totals for the year ended September 30, 2004
Combining Balance Sheet – September 30, 2004
Combining Statement of Revenues, Expenses, Transfers and
Changes in Net Assets for the year ended September 30, 2004
43
44-45
46
47-48
Independent Auditor’s Report
Board of Governors
Wayne State University
We have audited the accompanying balance sheets of Wayne State University as of September 30, 2005
and 2004 and the related statements of revenues, expenses and changes in net assets and cash flows for
the years then ended. These financial statements are the responsibility of the University’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America and Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Wayne State University as of September 30, 2005 and 2004 and the results of its
operations and cash flows for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report under separate cover
dated December 9, 2005 on our consideration of the University’s internal control over financial reporting
and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements,
and other matters for the year ended September 30, 2005. The purpose of that report is to describe the
scope of our testing of internal controls over financial reporting and compliance and the results of that
testing, and not to provide opinions on the internal control or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
The management’s discussion and analysis presented on pages 2 through 18 is not a required part of the
basic financial statements but is supplemental information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of
management, regarding the methods of measurement and presentation of the supplemental information.
However, we did not audit the information and express no opinion on it.
December 9, 2005
1
Wayne State University
Management’s Discussion and Analysis - Unaudited
INTRODUCTION
The following discussion and analysis provides an overview of the financial position and activities of Wayne
State University (the “University”) as of and for the year ended September 30, 2005, with selected
comparative information as of and for the years ended September 30, 2004 and 2003. This discussion has
been prepared by management and should be read in conjunction with the University’s financial
statements and related notes for the year ended September 30, 2005.
The University is a comprehensive public institution of higher learning in southeast Michigan with
enrollment of over 33,000 students and approximately 2,800 faculty members. It offers a diverse range of
programs from bachelor’s degrees to post-doctoral degrees, through a framework of departmental units
in 11 schools and colleges. The University also contributes to the state and nation through related
research and public service programs. The University employs over 5,000 full-time employees.
Excellence in research is a crucial element in the University’s mission. Based on the 2003 National Science
Foundation Research and Development Expenditures Survey, the most recent survey results available, the
University ranked 65th among all universities and 43rd among public universities. A substantial portion of
the University’s research is conducted at the School of Medicine. The University also has a research
affiliation agreement with the Karmanos Cancer Institute, one of 28 comprehensive cancer research
centers designated by the National Cancer Institute. The fiscal year 2003 National Science Foundation
Research and Development Expenditures Survey ranked the University 53rd in the life sciences category.
USING THIS REPORT
The University’s financial report includes three basic financial statements: the Balance Sheet, which
presents the assets, liabilities, and net assets of the University at the end of the fiscal year, the Statement
of Revenues, Expenses and Changes in Net Assets, which reflects revenues and expenses recognized
during the fiscal year, and the Statement of Cash Flows, which provides information on major sources and
uses of cash during the fiscal year. These financial statements are prepared in accordance with
Governmental Accounting Standards Board (GASB) principles, which establish standards for external
financial reporting for public colleges and universities and require that financial statements be presented on
a combined basis to focus on the University as a whole. Consistent with GASB principles, the Wayne
State University Housing Authority and the Wayne State University Foundation, as controlled
organizations, are included in the combined financial statements.
OVERALL FINANCIAL HIGHLIGHTS
The University’s financial position remained strong at September 30, 2005 with assets of $1.4 billion and
liabilities of $551 million. Combined net assets, for all funds, which represent the residual interest in the
University’s assets after liabilities are deducted, increased during the year to $810 million, an increase of
$38 million or 4.9%.
2
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Financial Position
The table below reflects the University’s combined total assets, liabilities and net assets at September 30
for the last three fiscal years.
(in millions)
2005
2004
2003
Total assets
$
Total liabilities
1,360.7 $
537.3
551.2
Net assets
$
809.5
1,309.2 $
$
771.9
1,166.7
391.6
$
775.1
Specific discussion and analysis of the changes in the components of the total combined assets, liabilities,
and net asset categories are provided on pages 4 – 10.
Operations
Summarized combined revenues and expenses (operating and non-operating) for the years ended
September 30, 2005, 2004 and 2003 are as follows:
(in millions)
2005
2004
2003
Total revenues
Total expenses
$
749.1 $
711.5
699.9 $
703.2
709.1
681.7
Increase (decrease) in net assets
$
37.6
$
(3.3) $
27.4
Fiscal year 2005 revenues increased $49.2 million (7.0%) over 2004, while expenses increased
$8.3 million (1.2%). Fiscal year 2004 revenues decreased $9.2 million (1.3%), compared to 2003, while
2004 expenses increased $21.5 million (3.2%) over the 2003 fiscal year. A more detailed discussion of
fluctuations in specific revenue and expense categories, activities and events contributing to these changes
and trends is included on pages 11-17 of the Management’s Discussion and Analysis.
3
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
BALANCE SHEET
The Balance Sheet presents the financial position of the University at the end of the fiscal year and includes
all assets and liabilities of the University. The difference between total assets and total liabilities, net
assets, is one indicator of the current financial condition of the University, while the change in net assets is
an indicator of how the current year’s operations have affected the overall financial condition of the
University. Assets and liabilities are generally measured using current values. One notable exception is
capital assets, which are stated at historical cost less accumulated depreciation.
A summarized comparison of the University’s assets, liabilities and net assets at September 30, 2005, 2004
and 2003 is as follows:
(in millions)
2005
2004
2003
Current assets
Noncurrent assets:
Investments
Noncurrent receivables, net
Unamortized bond issue costs
Capital assets, net
$
382.9 $
360.7 $
344.5
234.4
40.5
1.8
701.1
279.9
30.4
1.9
636.3
169.1
30.7
1.1
621.3
1,360.7
1,309.2
1,166.7
Current liabilities
218.8
200.7
165.4
Noncurrent liabilities
332.4
336.6
226.2
551.2
537.3
391.6
809.5 $
771.9 $
775.1
Total assets
Total liabilities
Net assets
$
4
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
The following is a summarized graphical illustration of the composition of the University’s Combined
Balance Sheet at September 30, 2005, 2004 and 2003:
Assets
2005
Other Assets
3%
Current Assets
28%
Capital Assets,
Net
52%
Investments
17%
2004
Other Assets
2%
2003
Current
Assets
28%
Other Assets
3%
Current Assets
30%
Capital Assets,
Net
53%
Capital
Assets, Net
49%
Investments
14%
Investments
21%
5
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Liabilities and Net Assets
2005
Current Liabilities
16%
Net Assets
60%
Noncurrent Liab.
24%
2004
2003
Current
Liabilities
14%
Current
Liabilities
15%
Net Assets
59%
Net Assets
67%
Noncurrent
Liab.
26%
6
Noncurrent
Liab.
19%
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Current Assets and Liabilities
Current assets are comprised primarily of cash and temporary investments and receivables of $368.0,
$348.5 and $331.9 million at September 30, 2005, 2004 and 2003, respectively. Cash and temporary
investments were $243.6 million at September 30, 2005, as compared to $227.5 and $229.9 million at
September 30, 2004 and 2003, respectively. The 2005 cash and temporary investments increase results
from positive cash flows associated with increases in tuition, sponsored program revenues, investment
income and increasing gifts related to the Wayne First Capital Campaign (“Wayne First”). Receivables
included in current assets have increased approximately $3.3 million to $124.4 million at September 30,
2005, compared to $121.1 million at September 30, 2004. The primary factors contributing to this
increase include the impact of increased tuition on student accounts receivable and increased sponsored
program revenues which resulted in increased receivables from sponsoring agencies, net of decreases in
“other” receivables.
The 2004 receivable increase of $19.1 million over the $102.0 million reported in 2003 reflected the
University’s first complete year of participation in the School as Lender Program, which resulted in $20.4
million in outstanding loans receivable in 2004 versus $5.7 million in 2003. The loans associated with this
program are sold to a third party within one year of issuance.
Current liabilities are comprised of amounts due within one year and consist primarily of accounts payable
and accrued expenses, deferred income and short-term loans against a line of credit. At September 30,
2005, current liabilities increased by $18.0 million when compared to September 30, 2004. The increase
was primarily attributable to increased tuition related deferred income resulting from the fall 2005 tuition
rate increase.
Current liabilities increased $35.3 million from 2003 to 2004. The aggregate increase includes:
•
•
•
A $14.5 million increase in short term loans which represented cash draws on a line of credit with a
bank associated with the University’s operation of the School as Lender program.
An increase in trade payables included in accounts payable and accrued liabilities of $7.1 million
relating to major construction projects in process at September 30, 2004.
Increased tuition related deferred income of approximately $3.2 million, resulting from increased fall
2004 enrollment and slightly higher tuition rates.
An overall analysis of the University current assets and current liabilities indicates favorable current ratios,
a measure of the University’s liquidity, of 1.8 at September 30, 2005 and 2004 and 2.1 in 2003.
7
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Noncurrent Assets and Liabilities
The most significant changes in the noncurrent sections of the Balance Sheet from 2004 to 2005 are a
decrease of $45.6 million in investments and a $64.8 million increase in net property, plant and equipment
(capital assets). These changes are more fully discussed in the Investments and Capital asset and debt
activities sections that follow.
Investments
The University’s investments are comprised of two components, endowment related funds and invested
unexpended general revenue bond proceeds. The Wayne State University Foundation manages the
majority (in excess of 99%) of the endowment investments. The component relating to the bond
proceeds is managed by the University.
The table below reflects the composition of investments at September 30, 2005, 2004 and 2003:
(in millions)
2005
2004
2003
Endowment funds
Bond proceeds
$
192.2 $
42.2
173.5 $
106.4
149.7
19.4
Total investments
$
234.4
279.9
169.1
$
$
Total investments decreased $45.5 million to $234.4 million at September 30, 2005, compared to
$279.9 million at September 30, 2004. While investment income and gifts to the University for
endowments rose during the year as a result of increases in the endowment funds’ investments, total
investments declined because of the expenditure of invested bond proceeds, which are expended as the
applicable capital projects progress. Increases in the endowment funds were the result of the University’s
ongoing capital campaign, Wayne First, and a favorable investment environment.
By comparison, total investments increased $110.8 million to $279.9 million at September 30, 2004,
compared to $169.1 million at September 30, 2003. The primary factor contributing to this increase was
that unexpended bond proceeds included in investments increased by $87.0 million because of the 2003
and 2004 series general revenue bonds issued during the 2004 fiscal year of $115.6 million, net of
construction expenditures of $28.6 million. The remaining increase of $23.8 million is attributable to
increased investment income and gifts to endowments, net of distributions from endowment funds to
spending accounts.
8
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Endowment funds consist of both permanent endowments ($85.7 million at September 30, 2005) and
funds functioning as endowments ($108.4 million at September 30, 2005). Permanent endowments are
those funds received from donors with the stipulation that the principal remain inviolate and be invested
into perpetuity to produce income to be distributed and used consistent with the donors’ restrictions and
University policy. Funds functioning as endowments consist of amounts (restricted gifts or unrestricted
funds) that have been allocated by the University to function as if they were permanent endowments.
Accordingly, these amounts are not subject to donor restrictions requiring the University to preserve the
principal in perpetuity. Programs supported by the endowments include scholarships, fellowships,
professorships, research efforts and other important University programs, activities and initiatives.
The University invests and uses its endowments to support operations in a way that strikes a balance
between generating a stream of annual support for current programs while preserving and increasing the
purchasing power of the endowment funds for future periods. During 2005, the University amended its
endowment rate spending policy. Under this policy the annual amount of the distribution is 4.75% of a
three year moving average of the market value of the endowment fund. Of this annual distribution,
4.25% will be transferred to the beneficiary or operating program accounts and .5% will be used for
administration. Prior to this change, the endowment spending rate policy provided for an annual
distribution of 5% of a 2½-year moving average market value (measured at quarterly intervals) of
endowment assets.
Capital asset and debt activities
One of the critical factors in continually enhancing the quality of the University’s academic and research
programs and residential life is the development and renewal of its capital assets. The University
continues to implement its long-range facilities plan by balancing its efforts to modernize its complement
of older teaching and research infrastructure with the construction of new facilities.
Capital additions during 2005 totaled $108.3 million, as compared to $60.9 million in 2004 and
$92.3 million in 2003. The 2005 capital additions consist primarily of the completion of a new residence
hall, major renovation to the Chemistry Building and energy related projects. During 2004, significant
capital expenditures related to beginning construction of a residence hall and renovations to academic,
research, and other administrative and ancillary facilities, as well as significant investment in equipment.
Capital asset additions were funded with capital appropriations, debt proceeds, gifts, and unrestricted net
assets, which were designated for capital purposes.
In its role of financial steward, the University works to manage its financial resources effectively, including
the use of debt to finance capital projects. The University’s most recent credit ratings which occurred in
fiscal year 2004, is “AA” - by both Fitch, Inc. and Standard & Poor’s Rating Service with the highest
achievable ratings being “AAA.” Management believes its current ratings are key indicators of the
University’s capacity to borrow effectively and its ability to meet its financial obligations.
9
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Bonds and Notes Payable totaled $306.9, $313.2 and $202.0 million at September 30, 2005, 2004 and
2003, respectively. The decrease from 2004 to 2005 results from bond principal payments, while the
increase from 2003 to 2004 was attributable to new bond issuances of $59.4 million (Series 2004), $51.6
million (Series 2003A) and $4.7 million (Series 2003B), net of long-term debt principal payments made
during fiscal year 2004. The proceeds of these issuances were to finance construction of a new student
residence hall, acquisition and installation of equipment related to energy conservation and efficiencies,
major research laboratory renovations, construction and renovations associated with the National Institute
of Health’s (NIH) Perinatology Research Branch contract facilities and renovations to other academic and
administrative facilities. Certain of these projects have been completed while others are in progress.
Net assets
Net assets represent the residual interest in the University’s assets after liabilities are deducted. The
University’s net assets at September 30, 2005, 2004 and 2003 are summarized as follows:
(in millions)
2005
2004
2003
Invested in capital assets, net of related debt
Restricted:
Nonexpendable
Expendable
Unrestricted
$
Total net assets
$
427.3 $
422.5 $
423.1
96.5
134.4
151.3
90.6
115.6
143.2
84.3
106.0
161.7
809.5
$
771.9
$
775.1
Descriptions of the components of total net assets are as follows:
♦ Invested in capital assets, net of related debt - Represents the University’s investment in property,
plant and equipment, net of accumulated depreciation and outstanding principal balances of debt
issued for the acquisition, construction or improvement of those assets, plus unspent bond proceeds.
Changes in the balance from year to year result from capital additions, issuance and payments of debt,
retirement of assets, and depreciation expense.
♦ Restricted nonexpendable – Primarily represents the corpus portion of gifts to the University’s
permanent endowment funds and certain net assets within the Student Loan Fund.
♦ Restricted expendable - Are comprised primarily of external gifts which are subject to externally
imposed restrictions governing their use (primarily scholarships and academic programs). This
category of net assets, which includes undistributed accretions of permanent endowment investments,
totaled $134.4, $115.6 and $106.0 million at September 30, 2005, 2004 and 2003, respectively. It
includes funds functioning as endowments of $102.3, $88.6, and $76.1 million at September 30, 2005,
2004 and 2003, respectively.
♦ Unrestricted - Represents funds which are not subject to externally imposed restrictions, however
most of the University’s unrestricted net assets at September 30, 2005 have been designated by the
Board of Governors and management for various academic, research and administrative programs, as
well as capital projects.
10
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
The Statement of Revenues, Expenses and Changes in Net Assets presents the operating results of the
University. A summarized comparison of this statement for the years ended September 30, 2005, 2004
and 2003, including a brief summary, discussion, and analysis, is provided below.
Revenues
Consistent with GASB requirements, revenues are categorized as operating or nonoperating.
Summarized classifications in each category for the years ended September 30, 2005, 2004 and 2003 are
presented below:
2005
Operating Revenues
Student tuition and fees
Less: Scholarship allowances
$
(in millions)
2004
2003
180.1 $
(49.4)
168.0 $
(46.5)
148.0
(39.9)
130.7
121.5
108.1
Sponsored programs
Other
269.5
45.6
257.8
39.5
237.8
29.7
Total operating revenues
445.8
418.8
375.6
223.2
36.6
29.5
2.5
11.5
-
216.9
29.4
23.6
1.4
7.5
2.3
245.5
30.2
40.1
6.1
11.6
-
303.3
281.1
333.5
Net student tuition and fees
Nonoperating and Other Revenues
State operating appropriations
Gifts
Net investment income
State capital appropriations
Capital and endowment gifts
Other
Total nonoperating and other revenues
Total Revenues
$
11
749.1
$
699.9
$
709.1
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
The following is a graphic illustration of revenues by source for the years ended September 30, 2005, 2004
and 2003.
Revenues
2005
Other
17%
Tuition & Fees, Net
17%
Sponsored
Programs
36%
State Approp.
30%
2004
Other
15%
Sponsored
Programs
37%
2003
Tuition &
Fees, Net
17%
Other
17%
Sponsored
Programs
34%
State
Approp.
31%
12
Tuition &
Fees, Net
15%
State
Approp.
34%
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Sponsored program revenues of $269.5 million presented on the table on page 11, consists of federal,
state, and nongovernmental grants and contracts, which in the aggregate, comprise the largest single
revenue source on the statement of revenues, expenses and changes in net assets. The state operating
appropriations represents the University’s largest single source of unrestricted revenue. As a result, the
state operating appropriations coupled with student tuition and fees, represent most of the resources
available to fund the University’s general operations. The University has in the past and will continue to
seek funding from all possible sources consistent with its mission, to supplement student tuition and fees
and state operating appropriations.
Operating Revenues
Operating revenues totaled $445.8 million in fiscal year 2005, as compared to $418.8 million in 2004 and
$375.6 million in 2003. The fiscal year 2005 increase is primarily attributable to increases in student
tuition and fees and sponsored program revenue which together comprise approximately 90% of the
University’s operating revenues. In 2005, net tuition and fees increased $9.2 million (7.6%) and $13.4
million (12.4%) in 2004. The 2005 increase is primarily attributable to the fall 2005 tuition rate increase of
18.5%, while the increase in 2004 resulted from increased student enrollment and credit hours and a
moderate 2.8% increase in tuition rates.
Revenues from sponsored programs increased $11.7 million (4.5%) during 2005 and $20.0 million (8.4%)
during 2004. Included in the 2005 increase in sponsored program revenue is the reallocation of funds,
$5.6 million, from the Joseph F. Young, Sr. Psychiatric Program which were previously provided to the
University as part of its state operating appropriation. In 2005 the state provided this funding from other
sources which results in the revenue being recorded as state grants and contracts which are reflected in
sponsored program revenue. The remainder of the increase is attributable to increases in various federal
research funds which the University continues to aggressively pursue. In 2004, approximately $12.0
million of the increase in sponsored program revenue was a result of the activities associated with the first
full year of operations of the Perinatology Research Branch, with the remainder of the increase
attributable to the University’s strategically planned emphasis on growth in other areas of research.
Auxiliary enterprises, which are included in the “Other” classification in the preceding table, also
experienced $1.9 million (9.1%) and $3.4 million (19.9%) revenue increases in fiscal years 2005 and 2004,
respectively. The 2005 increase is largely attributable to the reclassification of the fitness center activities
into the auxiliary activities fund. Previously these activities were accounted for in the University’s general
fund. In addition, parking rate increases and increasing residence hall room and board revenue and
activities including the opening of the University’s third residence hall in August 2005 has also contributed
to increased revenue. The auxiliary activities increase in 2004 over 2003 relates primarily to room and
board revenue generated by the opening of the new South Residence Hall, which was open and in
operation for just one month in fiscal year 2003, and a full year during 2004.
13
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Nonoperating and Other Revenues
Nonoperating and other revenues were $303.3 million during 2005, as compared to $281.1 million in
2004 and $333.5 million in 2003. The primary source of nonoperating revenue is the state operating
appropriations, which increased $6.3 million (2.8%) in 2005 and declined by $28.6 million (11.7%) as a
result of the budget reductions imposed by the State of Michigan in 2004. The 2005 increase includes a
$6.8 million one-time reinstatement of a portion of the 2004 appropriation reduction which was received
by the University in October 2004. As a result, these funds are reflected in fiscal year 2005 operations.
As discussed above, during 2005, the state operating appropriation was also reduced by $5.6 million
relating to the Joseph F. Young, Sr. Psychiatric Program. These funds were restored by the State through
other funding sources and are now reflected in sponsored program revenue.
Net investment income, included in nonoperating and other revenues, increased approximately $5.9
million during 2005 compared to a decrease of $16.5 million in 2004. The increase in 2005 is due to
favorable endowment fund performance and higher short term interest rates earned on cash and
temporary investments. The 2004 decrease in investment income occurred because fiscal year 2003
revenues reflected a significant one-time gain (approximately $13 million) on the sale of stock in a
company having patented intellectual property, in which the University held an interest. Of the actual
current year net investment income from all sources, $20.8 million is attributable to the University’s
endowments with the remainder of $8.7 million representing the investment income related to all other
University funds.
State capital appropriations, which are received from the State of Michigan, increased $1.1 million (70.0%)
in fiscal year 2005 to $2.5 million. In fiscal year 2004, state capital appropriations totaled $1.4 million,
which represented a decline of $4.7 million (77.0%) from 2003. These capital appropriations are for
projects approved several years ago. The State has not approved any new capital projects since the 2000
fiscal year. However, during 2005 the State authorized the University to plan a capital project relating to
the construction of a new Engineering Development Center Facility at a total estimated project cost of
$26.5 million of which $15.0 million would be provided by the State once the project is approved for
funding. The authorization to plan does not, however, necessarily commit the State to fund the project
and as a result, such funding is tentative until the approval and authorization process is completed
sometime in the future. The increase in other revenue from 2003 to 2004 resulted from a gain on the sale
of university owned real estate and miscellaneous income associated with the discounting of general
revenue bonds issued during 2004. Neither of these type of transactions occurred during 2005.
Capital and endowment gifts represent funds received from foundations, individuals and other private
sources. These gifts increased $4.0 million (53.3%) to $11.5 million in 2005. This fiscal year 2005
increase is primarily attributable to the launch of the public phase of the on-going capital campaign,
“Wayne First”. Gifts of $7.5 million received in fiscal 2004 were $4.1 million (35.3%) less than the $11.6
million received in 2003. Certain gifts received in 2004 and 2003, related to the Law School and the
Eugene Applebaum College of Pharmacy and Health Sciences buildings, which preceded the “Wayne First”
campaign. As a result during 2005, gifts related to these projects were declining as the majority of gifts
were collected and recognized in prior fiscal years.
14
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Expenses
Operating and nonoperating expenses by functional classification for the years ended September 30, 2005,
2004 and 2003 are presented below:
(in millions)
2005
2004
2003
Operating Expenses
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships (excluding amounts
applied directly to tuition - see note on page 23)
Auxiliary enterprises
Depreciation expense
$
Total operating expenses
Nonoperating and other expenses
Interest expense
Other
Total nonoperating and other expenses
Total Expenses
$
238.3 $
148.6
51.6
56.7
30.2
52.9
58.2
233.5 $
151.4
46.3
58.6
28.6
50.8
58.9
226.8
139.0
40.3
52.9
28.9
55.1
54.2
1.3
17.4
41.7
0.6
16.7
43.8
2.7
14.8
43.3
696.9
689.2
658.0
11.8
2.8
10.6
3.4
8.4
15.3
14.6
14.0
23.7
711.5
$
703.2
$
681.7
A graphic illustration of expenses by function for the years ended September 30, 2005, 2004 and 2003 is
presented on the following page.
15
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
Expenses by Function
2005
Auxiliary Ent.
2.4%
Depreciation
5.9%
Oper/Maint.
8.2%
Inst. Support
7.4%
Scholarships
0.2%
Interest Exp.
1.7%
Other
0.4%
Instruction
33.5%
Student Svcs.
4.2%
Acad. Support
8.0%
Public Svc.
7.2%
2004
Research
20.9%
2003
Interest Exp.
Auxiliary Ent. Depreciation 1.2%
Other
6.4%
2.2%
2.2%
Oper/Maint.
Instruction
7.9%
33.3%
Inst. Support
8.1%
Scholarships
0.4%
Student Svcs.
4.2%
Research
Acad. Support Public Svc.
20.4%
7.8%
5.9%
Auxiliary Ent. DepreciationInterest Exp.
1.5%
2.4%
6.2%
Other
Oper/Maint.
Instruction
0.5%
8.4%
33.2%
Inst. Support
7.2%
Scholarships
0.1%
Student Svcs.
4.1%
Acad.
Research
Support Public Svc.
21.5%
6.6%
8.3%
Operating Expenses
Operating expenses totaled $696.9, $689.2 and $658.0 million including depreciation of $41.7, $43.8 and
$43.3 million for 2005, 2004 and 2003, respectively.
As previously discussed, despite necessary cost control and reductions due to State funding cuts, the
University continues to maintain its commitment to instruction and research. Combined expenditures for
instruction increased $4.8 million (2.1%) to $238.3 million in 2005 and $6.7 million (3.0%) to $233.5
million in 2004, as compared to $226.8 million in 2003. Actual combined expenditures for research
decreased slightly $2.8 million (1.8%) to $148.6 million in 2005. While federal research expenditures
increased by approximately $3.6 million in 2005, the overall slight decline in total research expenditures
occurred because of a decrease in funding from state and local governmental sources and similar
decreases from local corporate sponsors. These declines are related to the economic climate in Michigan
overall and Southeastern Michigan, specifically. Research expenditures for 2004 increased $12.4 million
(8.9%) to $151.4 million in 2004, as compared to $139.0 million in 2003. Other significant 2004 expense
increases included a $4.7 million (8.7%) increase in operation and maintenance of plant resulting from
increased utilities and maintenance associated with acquired and constructed buildings, escalating
purchased steam rates which affected energy costs in many University buildings and an increase in general
16
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
facilities repairs. The $.7 million increase in the auxiliary activities operating expense category in 2005 is
largely attributable to the reclassification of the fitness center operations and its related expenses of
approximately $851,000 to the auxiliary activities fund. As discussed on page 13, the fitness center
operations were previously accounted for in the general fund. The $1.9 million or 12.8% increase in the
expenses in auxiliary activities from 2003 to 2004 is related to the costs associated with the operation and
maintenance of a new residence hall, and increased expenditures to improve the University’s parking
facilities and operations.
Nonoperating and Other Expenses
Interest expense totaled $11.8, $10.6 and $8.4 million in 2005, 2004 and 2003, respectively. The
increasing interest expense is attributable to the increasing bond indebtedness which has occurred since
1998 in conjunction with a series of facilities construction and other capital projects. The decrease in
other expenses from $15.3 million in 2003 to $3.3 million in 2004 represents an extraordinary amount
(approximately $11 million) relating to the write-off of the undepreciated cost of certain capital assets in
conjunction with a change in the University’s equipment capitalization policy in 2003. Prior to 2003, the
University capitalized equipment with an acquisition cost of $2,500 or greater. The 2003 policy change
increased the University equipment capitalization threshold to $5,000. All equipment with an original cost
between $2,500 and $5,000 and the related accumulated depreciation were written off and removed
from the University’s Balance Sheets.
STATEMENT OF CASH FLOWS
The statement of cash flows provides additional information about the University’s financial results, by
reporting relevant information about the University’s cash receipts and cash payments during the year. A
comparative summary of the statement of cash flows for the years ended September 30, 2005, 2004 and
2003 is as follows:
(in millions)
2004
2003
2005
Cash Flows
Cash received from operations
Cash expended for operations
Net cash used in operating activities
Net cash provided by noncapital financing activities
Net cash provided by (used in) capital and related
financing activities
Net cash provided by (used in) investing activities
Net increase (decrease) in cash and temporary
investments
$
Cash and Temporary Investments - Beginning of Year
Cash and Temporary Investments - End of Year
$
459.4 $
(659.6)
(200.2)
260.8
423.8 $
(654.9)
(231.1)
254.4
389.9
(610.7)
(220.8)
277.6
(120.5)
76.0
48.4
(74.1)
(41.6)
(1.3)
16.1
227.5
(2.4)
229.9
13.9
216.0
243.6
$
227.5
$
229.9
GASB requires that general appropriations from the State and noncapital gifts be shown as cash flows from
noncapital financing activities. The University’s most significant source of cash provided by noncapital
financing activities is the state operating appropriation which totaled $223.2, $217.6 and $244.8 million in
fiscal years 2005, 2004 and 2003, respectively. Included in cash flows provided by and used in capital and
related financing activities are all plant funds (except depreciation and amortization) and related long-term
17
Wayne State University
Management’s Discussion and Analysis - Unaudited (Continued)
debt activities, as well as capital gifts. Cash flows provided by or used in investing activities shows all uses
of cash and cash equivalents to purchase investments, and all increases in cash and temporary investments
as a result of selling investments or earning income on cash and investments. The net cash provided by
investing activities is made up of bond proceed investments sold to finance associated construction
expenditures, and the conversion of short-term investments into cash equivalents during the year.
ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE
These continue to be challenging financial times for higher education, particularly in the State of Michigan.
As a result of economic pressures affecting the State of Michigan, state appropriations, the University’s
largest single unrestricted revenue source, continues to decline. This reduction, combined with continued
increases in the cost of utilities, health care and compensation, have required management to institute cost
containment measures and operating efficiencies, as well as significantly increase tuition, in order to
maintain a balanced budget. The University’s reliance on state appropriations for general operations
creates a direct relationship between future appropriation reductions and the need to increase tuition and
fees. While the State of Michigan’s State Building Authority has supported the University’s renewal and
development of new core academic facilities in the past, in recent years, this has not been the case and the
economic pressures affecting the State may continue to negatively affect future support in this area.
Private gifts are an important supplement to the fundamental support provided by state appropriations
and student tuition, and a significant factor in the growth of academic units. Economic pressures affecting
donors may also affect the future level of support the University receives from corporate and individual
giving.
18
Wayne State University
Balance Sheets
September 30
2005
Assets
Current Assets
Cash and temporary investments (Note 2)
Current receivables, net (Note 3)
Inventories
Prepaid expenses and deposits
$
Total current assets
$
227,468,535
121,064,397
1,512,904
10,692,372
360,738,208
234,351,775
40,520,056
1,822,328
701,062,241
279,907,413
30,358,072
1,879,215
636,305,393
977,756,400
948,450,093
$ 1,360,703,394
$ 1,309,188,301
$
$
Total noncurrent assets
Total assets
243,552,859
124,411,818
1,402,027
13,580,290
382,946,994
Investments (Note 2)
Noncurrent receivables, net (Note 3)
Unamortized bond issue costs
Capital assets, net (Note 4)
Current Liabilities
Accounts payable and accrued liabilities
Deferred income
Deposits
Short-term loans (Note 3)
Current portion of long-term debt (Note 5)
2004
Liabilities and Net Assets
Total current liabilities
83,739,718
101,936,544
5,624,596
21,233,779
6,237,894
78,277,061
89,237,055
6,981,239
20,398,778
5,834,359
218,772,531
200,728,492
25,102,840
6,568,319
300,711,847
24,093,358
5,091,702
307,366,992
Total noncurrent liabilities
332,383,006
336,552,052
Total liabilities
551,155,537
537,280,544
427,257,968
422,498,303
96,493,014
134,436,843
151,360,032
90,637,745
115,588,375
143,183,334
809,547,857
771,907,757
$ 1,360,703,394
$ 1,309,188,301
Noncurrent Liabilities
Federal portion of student loan funds
Accrued employee benefits
Long-term debt (Note 5)
Net Assets
Invested in capital assets, net of related debt
Restricted
Nonexpendable
Expendable
Unrestricted
Total net assets
Total liabilities and net assets
See Notes to Financial Statements.
19
Wayne State University
Statements of Revenues, Expenses and Changes in Net Assets
Year Ended September 30
2005
2004
Operating Revenues
Student tuition and fees
Less: Scholarship allowances
Net student tuition and fees
Federal grants and contracts
State and local grants and contracts
Nongovernmental grants and contracts
Departmental activities
Auxiliary enterprises (net of scholarship allowances of $1,445,882
for 2005 and $1,750,707 for 2004)
Other operating revenues
Total operating revenues
$
Operating Expenses (Note 9)
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships
Auxiliary enterprises
Depreciation expense
Total operating expenses
Operating loss
Nonoperating Revenues (Expenses)
State operating appropriations
Gifts
Investment income
Interest on capital asset - related debt
Other
Net nonoperating revenues
Income (loss) before other revenues and expenses
Other Revenues (Expenses)
State capital appropriations
Capital gifts
Loss on capital assets retired
Private gifts for endowment purposes
Net other revenues
Increase (decrease) in net assets
Net Assets
Beginning of year
End of year
See Notes to Financial Statements.
$
20
180,131,105 $
(49,394,670)
130,736,435
142,335,194
28,703,300
98,472,191
21,881,835
167,943,273
(46,446,364)
121,496,909
134,839,039
22,258,139
100,704,456
16,944,498
22,332,387
1,412,812
445,874,154
20,464,946
2,092,947
418,800,934
238,343,759
148,601,703
51,572,052
56,722,153
30,226,536
52,877,457
58,178,069
1,321,317
17,391,079
41,663,751
696,897,876
233,512,055
151,426,342
46,298,270
58,588,464
28,570,519
50,757,547
58,934,279
625,151
16,702,432
43,768,116
689,183,175
(251,023,722)
(270,382,241)
223,236,100
36,597,150
29,489,912
(11,849,792)
(946,227)
276,527,143
216,865,900
29,353,815
23,648,868
(10,583,858)
2,281,781
261,566,506
25,503,421
(8,815,735)
2,455,347
6,921,895
(1,839,735)
4,599,172
12,136,679
1,444,133
2,224,500
(3,361,255)
5,281,172
5,588,550
37,640,100
(3,227,185)
771,907,757
809,547,857
$
775,134,942
771,907,757
Wayne State University
Statements of Cash Flows
Year Ended September 30
2005
2004
Cash Flows from Operating Activities
Tuition and fees
$ 142,059,487 $ 126,980,561
Grants and contracts
267,047,036
250,515,295
Auxiliary enterprises
25,907,074
18,257,007
Departmental activities
17,630,032
21,625,227
Loans issued to students
(5,868,915)
(20,580,590)
Collection of loans from students
5,384,061
4,379,017
Scholarships and fellowships
(4,397,577)
(687,297)
Payments to suppliers
(174,541,489)
(184,302,313)
Payments to employees
(474,826,215)
(449,410,275)
1,416,021
2,091,646
Other receipts
Net cash used in operating activities
(200,190,485)
(231,131,722)
Cash Flows from Noncapital Financing Activities
State operating appropriations
223,236,100
217,619,305
Gifts
30,923,311
29,090,319
Private gifts for endowment purposes
4,599,172
5,281,172
Student direct lending receipts
(33,405)
27,633,854
Student direct lending disbursements
(27,035,929)
FFELPS student lending receipts
95,417,926
78,847,354
FFELPS student lending disbursements
(94,513,904)
(77,909,122)
1,123,171
944,347
Other
Net cash provided by noncapital financing activities
260,752,371
254,471,300
Cash Flows from Capital and Related Financing Activities
State capital appropriations
1,209,075
298,042
Capital gifts and grants
2,717,536
3,295,483
Proceeds from issuance of debt and other long term obligations
115,580,000
Bond issue costs paid and discount
(1,402,585)
Purchase of capital assets
(105,885,083)
(55,305,522)
Principal paid on capital debt
(6,641,176)
(3,551,667)
(11,907,598)
(10,546,673)
Interest paid on capital debt
Net cash provided by (used in) capital and related financing activities
(120,507,246)
48,367,078
Cash Flows from Investing Activities
22,035,227
20,968,280
Investment income, net
144,118,779
Proceeds from sales and maturities of investments
181,150,857
(127,156,400)
(239,171,355)
Purchase of investments
76,029,684
(74,084,296)
Net cash provided by (used in) investing activities
Net Increase (Decrease) in Cash and Temporary Investments
16,084,324
(2,377,640)
229,846,175
227,468,535
Cash and Temporary Investments, beginning of year
$ 243,552,859 $ 227,468,535
Cash and Temporary Investments, end of year
Operating loss
Adjustments to reconcile net operating loss to net cash from
operating activities:
Depreciation expense
(Increase) decrease in assets:
Accounts receivable, net
Inventories and other assets
Increase (decrease) in liabilities:
Accounts payable, accrued expenses and other liabilities
Deposits held for others
Deferred income
Accrued employee benefits
41,663,751
43,768,116
(698,960)
(2,877,041)
(19,092,278)
383,456
2,206,004
(1,717,059)
11,135,375
1,121,167
7,891,867
2,439,390
2,500,380
1,359,588
$ (200,190,485) $ (231,131,722)
Net cash used in operating activities
See Notes to Financial Statements.
$ (251,023,722) $ (270,382,241)
21
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 1 - Basis of Presentation and Significant Accounting Policies
Overview
Wayne State University (the “University”) is a state-supported institution with an enrollment of over
33,000 students. The financial statements include the individual schools, colleges and departments
and all controlled organizations. The controlled organizations are the Wayne State University
Housing Authority and the Wayne State University Foundation. The Housing Authority manages the
University’s residence halls, apartments and related activities and the Foundation facilitates the
University’s fund-raising activities and manages most of the University’s endowment funds. While
the University is a political subdivision of the State of Michigan, it is not a component unit of the
State of Michigan as defined by the provisions of Governmental Accounting Standards Board (GASB)
Statement No. 14, The Financial Reporting Entity. The University is classified as a State
instrumentality under Internal Revenue Code Section 115, and is also classified as an educational
organization under Internal Revenue Code Section 501(c)(3), and is therefore generally exempt
from federal and state income taxes. Certain activities of the University may be subject to taxation
as unrelated business income under Internal Revenue Code Sections 511 to 514.
Basis of Presentation
The financial statements have been prepared in accordance with generally accepted accounting
principles as prescribed by the Governmental Accounting Standards Board (GASB) in Statement No.
34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local
Governments and the balance sheets, statements of revenues, expenses and changes in net assets,
and cash flows are reported on a combined basis, and all intra-university transactions are eliminated
in accordance with GASB Statement No. 35, Basic Financial Statements and Management’s Discussion
and Analysis of Public Colleges and Universities.
Net Assets - Consistent with GASB Statement No. 35, the University reports its net assets in four
categories:
•
•
Invested in capital assets, net of related debt – Represents the University’s investment in
property, plant and equipment, net of accumulated depreciation and outstanding principal
balances of debt issued for the acquisition, construction or improvement of those assets, plus
unspent bond proceeds. Changes in the balance from year to year result from capital
additions, issuance and payments of debt, retirement of assets, and depreciation expense.
Restricted nonexpendable – Primarily represents the corpus portion of gifts to the University’s
permanent endowment funds and certain net assets within the Student Loan Fund.
22
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 1 - Basis of Presentation and Significant Accounting Policies
(continued)
•
•
Restricted expendable - Are comprised primarily of external gifts which are subject to
externally imposed restrictions governing their use (primarily scholarships and academic
programs). This category of net assets includes $102.3 and $88.6 million of funds functioning as
endowments in 2005 and 2004, respectively. Restricted expendable net assets also include
undistributed accretions of permanent endowment investments.
Unrestricted - Represents funds which are not subject to externally imposed restrictions,
however most of the University’s unrestricted net assets at September 30, 2005 have been
designated for various academic, research and administrative programs, as well as capital
projects.
Summary of Significant Accounting Policies
The accompanying financial statements have been prepared on the accrual basis. The University
reports as a Business Type Activity, as defined by GASB Statement No. 35. Business Type Activities
are those that are financed in whole or in part by fees charged to external parties for goods or
services.
Student tuition and residence fees are presented net of scholarships and fellowships applied to
student accounts, while stipends and other payments made directly to students are presented as
scholarship and fellowship expenses.
Consistent with GASB Statement No. 35, the University defines operating activities as reported in
the statements of revenues, expenses and changes in net assets, as those that generally result from
exchange transactions such as revenues received for tuition and fees, as well as sponsored services
from sponsored programs and expenses paid for goods or services. State appropriations, gifts and
investment activity are recorded as non-operating revenue.
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
amounts reported in the financial statements and accompanying notes. Actual results could differ
from those estimates.
Investments - Investments in marketable securities are recorded at market value, as established by
the major securities markets. Purchases and sales of investments are accounted for on the trade
date basis. Realized and unrealized gains and losses are reported as investment income.
For donor restricted endowments, the Uniform Management of Institutional Funds Act, as adopted
in Michigan, permits the Board of Governors to spend an amount of realized and unrealized
endowment appreciation as they determine prudent. The University’s policy is to retain the
realized and unrealized appreciation with the endowment after spending rule distributions are
applied. The University’s endowment spending rate policy which was changed during fiscal year
2005, provides for an annual distribution of 4.75% of a 3-year moving average market value
(measured at quarterly intervals) of endowment assets. Prior to the change the annual distribution
rate was 5% of a 2½-year moving average market value of endowment assets.
23
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 1 - Basis of Presentation and Significant Accounting Policies
(continued)
Deferred Income - Represents amounts received or recognized in advance of an event, such as
portions of student tuition received or due prior to October 1 and amounts received from grant and
contract sponsors which have not yet been earned under the terms of the agreements.
Inventories - Inventories are stated at the lower of cost or market.
Prepaid Expenses and Deposits – Primarily represent cash payments in advance of when the
related expenditures will be recognized for financial statement purposes and consists primarily of
prepaid student financial aid which is paid to students at the beginning of the fall term of each fiscal
year but recognized for accounting purposes over the duration of the fall term.
Capital Assets - Capital assets are recorded at cost or, if acquired by gift, at the fair market value
as of the date of donation. Depreciation is computed on the straight-line method over the
estimated service lives (five to forty years) of the respective assets.
Revenue Recognition - State appropriations for operating and capital purposes are recognized in
the period they are appropriated. Grant and contract revenue is recognized as the underlying
expenditures are incurred. State Building Authority funds are recognized as the University incurs
eligible Authority capital project expenditures.
The University receives pledges and bequests of financial support from corporations, foundations
and individuals. Revenue is recognized when a pledge representing an unconditional promise to pay
is received and all eligibility requirements, including time requirements, have been met. In the
absence of such promise, revenue is recognized when the gift is received. Endowment pledges and
conditional promises do not meet eligibility requirements, as defined by GASB Statement No. 33,
Financial Reporting for Non-Exchange Transactions, and are not recorded as assets until the related gift
is received.
Unconditional promises to give that are expected to be collected in future years are recorded at the
present value of the estimated future cash flows. The discounts on these amounts are computed
using risk-free interest rates applicable to the years in which the promises are made, commensurate
with expected future payments. Allowance for uncollectible pledge receivables are provided based
on management’s judgment of potential uncollectible amounts.
The University disbursed approximately $94,500,000 and $104,900,000 in 2005 and 2004,
respectively, for student loans through the U.S. Department of Education federal direct lending and
federal guaranteed student loan programs. These disbursements and the related receipts are not
included as revenues or expenditures in the accompanying Statements of Revenues, Expenses and
Changes in Net Assets. The disbursements and related receipts are reflected in the noncapital
financing activities section of the cash flow statement. During 2004, the University ceased its
participation in the direct lending program.
Reclassifications - Certain fiscal year 2004 balances have been reclassified to conform to the
current year presentation.
24
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments
The University has adopted GASB Statement No. 40, Deposit and Investment Risk Disclosures for the
years ended September 30, 2005 and 2004.
The University’s cash and investments are included in the Balance Sheets under the following
classifications:
2005
2004
Cash and temporary investments
$ 243,552,859 $ 227,468,535
Investments:
Endowment fund
Bond proceeds
Total investments
192,169,285
42,182,490
173,498,347
106,409,066
234,351,775
279,907,413
$ 477,904,634 $ 507,375,948
Total cash and investments
The University’s cash and investments consist of the following:
2005
Certificate of deposit and savings accounts
Fixed income investments
Equity security investments
Other
Checks issued in excess of available cash balances
Total cash and investments
$
2004
16,371,540 $ 35,878,991
329,845,293
357,104,863
135,311,090
118,810,436
5,257,894
5,780,618
(10,198,960)
(8,881,183)
$ 477,904,634 $ 507,375,948
Deposits
Deposits are managed in accordance with the Board of Governors’ Cash Management Policy. This
policy allows investments to be made in bank certificates of deposit, bankers’ acceptances, and
secondary market certificates of deposit. This policy also provides that investments in bank
instruments may be in those issued by any bank chartered in the United States of America which is a
member of the Federal Reserve System or in any bank chartered by the State of Michigan.
Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the
University’s deposits may not be available or returned. The University does not have a deposit
policy for custodial credit risk. At September 30, 2005 and 2004, the carrying amount of the
University’s deposits was $16,862,816 and $55,389,280, respectively. Of that amount $709,324 and
$715,769, respectively, was insured. The remaining $16,153,492 and $54,673,511 at September 30,
2005 and 2004, respectively, was uninsured and uncollateralized. The University does not require
deposits to be insured or collateralized. It is precluded by state law from collateralizing its deposits.
25
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 – Cash and Investments (continued)
Foreign Currency Risk – Foreign currency risk is the risk that changes in exchange rates will
adversely affect the fair value of a deposit. The University does not have a deposit policy for foreign
currency risk. The University did not have any deposits denominated in foreign currencies at
September 30, 2005 and 2004.
Investments
The Cash and Temporary Investments and Investments-Bond Proceeds are managed in accordance
with the Board of Governors Cash Management Policy. Almost all of the Investments-Endowment
Fund (approximately 99%) are managed in accordance with a separate Investment Policy approved
by the Foundation Board of Trustees. Although, the University has some investments that are
restricted by external agreements or by special donor limitations.
The Board of Governors’ Cash Management Policy allows investments to be made in bank
repurchase agreements, corporate fixed income securities with limited maturities, municipal
obligations, United States Treasury bills and notes, other United States agency notes, commercial
paper, and any other instruments that have been selected and approved by the Common Fund
Short and Intermediate-Term investment pools, including the Global Fund. This policy also provides
that investments in bank instruments may be in those issued by any bank chartered in the United
States of America which is a member of the Federal Reserve System or in any bank chartered by the
State of Michigan.
The Endowment Investment Policy sets a general target for investments of 50 percent United States
equities, 15 percent Non-United States equities, 25 percent for fixed income securities, and 5
percent for both hedge and real estate funds. Each of these targets has a permitted range of 45 to
55 percent, 13 to 17 percent, 20 to 30 percent and 0 to 8 percent, respectively. Diversification is a
fundamental risk management strategy and these funds are broadly diversified.
Custodial Credit Risk – For investments, custodial credit risk is the risk that in the event of the
failure of the counterparty, the University will not be able to recover the value of its investments
that are in the possession of an outside party. The University and the Endowment’s investment
policies do not limit the value of investments that may be held by an outside party. Investments in
external investment pools and in open ended mutual funds are not exposed to custodial credit risk
because their existence is not evidenced by securities that exist in physical or book entry form. The
University’s counterparties held $355,416,001 of its portfolio at September 30, 2005 and
$262,563,043 at September 30, 2004.
26
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments (continued)
Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the
fair value of an investment. As a means of limiting its exposure to fair value losses resulting from
rising interest rates, the University’s Cash Management Policy limits the maturities and the
maximum maturities of its investments. Securities exceeding maturities of one year are limited to
corporate fixed income securities maturing less than or equal to three years, United States treasury
notes and instruments maturing less than or equal to seven years, and intermediate-term investment
pools (those with securities maturing on an average of seven years or less). In addition, securities
with maturities exceeding one year are limited to 70% of the total investments.
The Endowment Investment Policy does not limit interest rate risk. The interest rate risk of the
fixed income securities is considered as part of the overall risk of this portfolio when establishing its
asset allocation. Investments are managed in accordance with asset allocation guidelines and
manager guidelines at time of manager appointment.
The University held the following types of fixed income investments and maturities, in years, at
September 30, 2005 and 2004:
2005 Maturities (in Years)
Less
Than 1
Types of Investments
U.S. Treasuries
U.S. Government Sponsored Enterprises
$
1-5
More
Than 10
6-10
49,783 $
48,720,152
7,549,410
21,656,001
Corporate Asset Backed Securities
External Investment Pools (1)
Money Market Mutual Fund (1) (2)
Corporate Securities
57,418,947
1,848,571
2,600,798
54,733,158
3,267,069
Commercial Paper
79,965,278
203,750
144,167
51,688,209
-
89,950,603 $
51,688,209
Fixed Income Institutional Bond Fund (1)
Non-U.S. Fixed Income Securities
Investment by Maturity
(1)
(2)
$
188,206,481 $
$
-
$
-
$
Total
-
$
7,599,193
70,376,153
-
2,600,798
54,733,158
57,418,947
5,115,640
-
79,965,278
51,688,209
347,917
-
$
329,845,293
This is the range in which the average maturity falls for these investment types.
Includes bond proceeds of $42,182,490, and a money market fund comprised primarily of U.S. Government Sponsored Enterprise
Investments totaling $9,794,977.
27
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments (continued)
2004 Maturities (in Years)
Less
Than 1
Types of Investments
U.S. Treasuries
$
U.S. Agencies
U.S. Government Sponsored Enterprise
Corporate Asset Backed Securities
Student Loan Asset Backed Securities
External Investment Pools (1)
Money Market Mutual Fund (1) (2)
Corporate Securities
Commercial Paper
Fixed Income Institutional Bond Fund (1
Non-U.S. Fixed Income Securities
Investment by Maturity
(1)
(2)
1-5
1,337,898 $ 6,793,549 $
38,889,157
15,755,366
2,156,193
30,050,000
53,865,359
119,466,506
1,813,834
34,933,150
-
7,778,213
271,251
6-10
110,840 $
2,538,954
762,038
4,143,739
25,091,496
-
More
Than 10
145,276
754,225
6,630,301
384,728
-
Total
$
8,387,563
754,225
63,813,778
3,302,959
30,050,000
53,865,359
3,432,790
-
119,466,506
17,168,576
34,933,150
25,091,496
271,251
$ 226,490,545 $ 86,619,931 $ 32,647,067 $ 11,347,320
$ 357,104,863
This is the range in which the average maturity falls for these investment types.
Includes bond proceeds of $106,409,066, and a money market fund comprised primarily of U.S. Government Sponsored Enterprise
Investments totaling $4,006,801.
Credit Risk – Credit risk is the risk that an issuer or counterparty to an investment will not fulfill its
obligations. Nationally recognized statistical rating organizations, such as Moody’s and Standard and
Poor’s, assign credit ratings to security issuers and issues that indicate a measure of potential credit
risk to investors. To limit its exposure to credit risk, the University’s Cash Management Policy limits
the minimum acceptable credit rating of individual investments as follows (Moody’s/Standard and
Poor’s): Commerical paper (P1/A1), Municipal obligations (A/A), Corporate Fixed Income Securities
(A/A). The University is in compliance with its credit risk policy for its related portfolios.
The Endowment Investment Policy does not limit the credit risk that an issuer of or counterparty to
an investment has. The credit risk of the Endowment’s fixed income securities is considered within
overall portfolio risk when establishing its total expected risk and investment return assumptions.
Investments are managed in accordance with asset allocation guidelines and manager guidelines at
time of manager appointment.
28
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments (continued)
The University held the following types of fixed income investments and credit ratings at September
30, 2005 and 2004:
Credit Rating
Non2005
U.S. Treasuries
U.S. Government Sponsored Enterprises
Corporate Asset Backed Securities
$
External Investment Pools (1)
Money Market Mutual Fund (1) (2)
Corporate Securities
Commercial Paper
Fixed Income Institutional Bond Fund (1)
Investment
investment
Grade
Grade
(1)
(2)
-
-
57,418,947
5,115,640
79,965,277
51,688,209
-
-
5,115,640
79,965,277
51,688,209
$
Total
$
70,376,153
2,600,798
54,733,158
57,418,947
Non-U.S. Fixed Income Securities
Investments by Rating
Not Rated
321,898,182 $
$ 7,599,194
-
$
7,599,194
70,376,153
2,600,798
54,733,158
-
347,917
347,917
-
$ 7,947,111
$ 329,845,293
This is the range in which the average credit rating falls for these investment types.
Includes bond proceeds of $42,182,490, and a money market fund comprised primarily of U.S. Government Sponsored Enterprise
Investments totaling $9,794,977.
Credit Rating
Non2004
U.S. Treasuries
U.S. Agencies
U.S. Government Sponsored Enterprises
Corporate Asset Backed Securities
Student Loan Asset Backed Securities
$
External Investment Pools (1)
Money Market Mutual Fund (1) (2)
Corporate Securities
Commercial Paper
Investment
Investment
Grade
Grade
$
57,126,402
3,220,211
30,050,000
53,865,359
119,466,506
14,367,930
34,933,150
25,091,496
Fixed Income Institutional Bond Fund (1)
(1)
(2)
1,984,176
-
$ 8,387,563
754,225
6,687,376
82,748
-
$
8,387,563
754,225
63,813,778
3,302,959
30,050,000
53,865,359
119,466,506
17,168,576
34,933,150
25,091,496
271,251
271,251
338,121,054 $ 1,984,176 $ 16,999,633
$ 357,104,863
$
-
Total
816,470
-
Non-U.S. Fixed Income Securities
Investments by Rating
Not Rated
-
This is the range in which the average credit rating falls for these investment types.
Includes bond proceeds of $106,409,066, and a money market fund comprised primarily of U.S. Government Sponsored Enterprise
Investments totaling $4,006,801.
29
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments (continued)
Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the
magnitude of investment in a single issuer. The University’s Cash Management Policy provides that
investment pool direct placements are to be sufficiently diversified and provides that no more than
10% of its assets can be in any particular issue. Direct placements are limited to 20% of total
resources with any given institution (banks, companies, or other institutions), including investment
pools. The foregoing restrictions do not apply to securities that are issued or fully guaranteed by the
United States government. The University is in compliance with its concentration of credit risk
policy.
The Endowment Investment Policy does not limit the concentration of credit risk that an issuer or
counterparty to an investment will not fulfill its obligations. The credit risk of the Endowment’s fixed
income securities is considered within the overall risk of this portfolio when establishing its total
expected risk and investment return assumptions. Investments are managed in accordance with
asset allocation guidelines and manager guidelines at time of manager appointment.
As of September 30, 2005, the University’s combined Cash and Temporary Investments and
Endowment Investment portfolio included 5% of its investments in Federal Home Loan Bank
securities and 5% of its investments in Federal National Mortgage Association securities. At
September 30, 2004, the University investment portfolio did not have investments in any single
issuer that equaled 5% or more.
Foreign Currency Risk – Foreign currency risk is the risk that changes in exchange rates will
adversely affect the fair value of an investment. The University’s Cash Management Policy allows
for the investment in instruments that have been selected and approved by the Common Fund
Short and Intermediate-Term investment pools, including their Global Fund. The University did not
have any direct investments denominated in foreign currencies at September 30, 2005 and 2004.
The Endowment Investment Policy does not limit the foreign currency risk. The asset allocation
does provide a target of 15% for Non-United States equities (with a maximum limit of 17%), but it
does not establish any limits on Non-U.S. fixed income securities. The foreign currency risk of these
Endowment investments is considered within the overall risk of this portfolio when establishing its
total expected risk and investment return assumptions. Investments are managed in accordance
with asset allocation guidelines and manager guidelines at the time of manager appointment. As of
September 30, 2005, the University had Endowment fund investments in Non-U.S. equities of
$32,006,012, which amounted to 16.7% of the University’s total Endowment fund investments, not
including commingled funds that were denominated in U.S. dollars. Of this amount, 32% was
exposed to European Union euro currency risk, 22% was exposed to the British pound currency
risk and 11% was exposed to Japanese yen currency risk. At September 30, 2004, $26,557,954 of
the University’s Endowment fund investments in Non-U.S. equity investments was exposed to
foreign currency risk, which amounted to 15.3% of the University’s total Endowment fund
investments. Of this amount, 33% was exposed to European Union euro currency risk, 27% was
exposed to the British pound currency risk, and 21% was exposed to Japanese yen currency risk.
For 2005 and 2004, the remaining investments in Non-U.S. equities had small exposures in the
individual currencies of several foreign countries.
30
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 2 - Cash and Investments (continued)
The University’s cash and temporary investments provided a return of 2.89% and 1.89% for the
years ended September 30, 2005 and 2004, respectively. The University’s endowment related
investments provided a return of 11.9 % and 11.0% for the years ended September 30, 2005 and
2004, respectively.
Note 3 - Receivables
At September 30, 2005 and 2004, receivables consist of the following:
Receivables from sponsoring agencies
Pledged gift receivables
Student notes receivables
Student accounts receivable
State appropriations receivable, capital projects
Other
$
Less: Provision for loss on receivables
Less: Unamortized discount to present value on
pledged gift receivables
Less: Current portion receivables, net
Total noncurrent receivables, net
$
2005
2004
43,694,830 $
21,942,366
49,319,124
48,988,309
2,033,354
9,726,954
40,663,029
8,403,386
49,408,560
43,015,645
1,287,083
14,312,893
175,704,937
(7,970,246)
157,090,596
(5,226,354)
(2,802,817)
(441,773)
164,931,874
(124,411,818)
151,422,469
(121,064,397)
40,520,056 $
30,358,072
Payments on pledged gift receivables at September 30, 2005 are expected to occur in the following
years ending September 30:
2006
2007-2016
Total
$
4,842,478
17,099,888
$
21,942,366
Student notes receivable consist of loans to students made from federal and University resources.
The principal repayment and interest rate terms on these loans vary considerably. The provision for
losses on receivables, which is applicable to the student notes receivables above, applies only to
University funded notes and the University portion of federal student loans, since Federal
regulations do not require the University to provide reserves on the federal portion of uncollectible
student loans. Federal loan programs are funded principally with federal advances to the University
under the Perkins and various health profession loan programs.
31
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 3 - Receivables (continued)
The University’s participation in the School as Lender Program, resulted in approximately
$21,400,000 and $20,400,000 in outstanding loans receivable at September 30, 2005 and 2004,
respectively. Under the School as Lender Program, the University disbursed approximately
$51,750,000 and $32,800,000 in loans to students during the years ended September 30, 2005 and
2004, respectively. All loans associated with this program are sold to a third party within one year.
The University sold $50,750,000 and $18,100,000 of such loans during the years ended
September 30, 2005 and 2004, respectively.
The University has secured a line of credit with a bank to fund loans issued in conjunction with the
School as Lender program. At September 30, 2005 and 2004, the University had outstanding loans
against the line of credit of $21,233,779 and $20,398,778, respectively.
Note 4 - Capital Assets
Capital assets activity for the years ended September 30, 2005 and 2004 was as follows:
Balance
September 30
2004
Land improvements
Buildings
Library materials
Equipment and software
Subtotal - depreciable assets
$
17,917,356
749,550,335
110,757,695
188,351,171
Additions
$
58,858
69,682,234
4,107,574
11,023,784
Retirements
$
-
Balance
September 30
2005
$
(548,250)
(39,757,299)
17,976,214
819,232,569
114,317,019
159,617,656
1,066,576,557
84,872,450
(40,305,549)
1,111,143,458
29,652,256
17,952,078
1,118,713
22,269,171
(48,838)
-
30,722,131
40,221,249
47,604,334
23,387,884
(48,838)
70,943,380
Total
Less accumulated depreciation:
Land improvements
Buildings
Library materials
Equipment and software
1,114,180,891
108,260,334
(40,354,387)
1,182,086,838
9,179,536
243,193,488
89,831,712
135,670,762
679,035
23,982,543
4,041,841
12,960,332
(38,514,652)
9,858,571
267,176,031
93,873,553
110,116,442
Total accumulated depreciation
477,875,498
41,663,751
(38,514,652)
481,024,597
Land
Construction in progress
Subtotal - nondepreciable assets
Capital assets, net
$ 636,305,393
32
$
66,596,583
$
(1,839,735) $ 701,062,241
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 4 - Capital Assets (continued)
Balance
September 30
2003
Land improvements
Buildings
Library materials
Equipment and software
Subtotal - depreciable assets
Land
Construction in progress
Subtotal - nondepreciable assets
$
16,622,988
721,005,166
107,185,630
189,311,745
Additions
$
1,034,125,529
29,669,809
4,155,221
1,294,368
33,355,594
3,911,165
8,514,840
Retirements
$
47,075,967
13,796,857
Balance
September 30
2004
$ 17,917,356
749,550,335
(4,810,425)
(339,100)
110,757,695
(9,475,414)
188,351,171
(14,624,939)
(17,553)
-
1,066,576,557
29,652,256
17,952,078
33,825,030
13,796,857
(17,553)
47,604,334
1,067,950,559
60,872,824
(14,642,492)
1,114,180,891
Less accumulated depreciation:
Land improvements
Buildings
Library materials
Equipment and software
8,550,739
225,850,446
85,664,766
126,522,668
628,797
21,630,923
4,166,946
17,341,450
(4,287,881)
(8,193,356)
9,179,536
243,193,488
89,831,712
135,670,762
Total accumulated depreciation
446,588,619
43,768,116
(12,481,237)
477,875,498
Total
Capital assets, net
$ 621,361,940
$
17,104,708
$
(2,161,255) $ 636,305,393
Construction in progress additions represent expenditures for uncompleted new projects, net of
the amounts of construction in progress from the preceeding years which were placed into service
as depreciable capital assets during the current fiscal year.
Several of the buildings on campus were financed through the issuance of bonds by the State of
Michigan Building Authority (SBA). The SBA bonds are secured by a pledge of rentals to be
received from the State of Michigan pursuant to a lease agreement entered into between the SBA.
the State of Michigan and the University. During the lease term, the SBA will hold title to the
buildings and land, the State of Michigan will make all lease payments to the SBA, and the University
will be responsible for all operating and maintenance costs. At the expiration of the lease, the SBA
will transfer title to the buildings and land to the University.
33
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 5 - Long-Term Debt
Long-term debt activity for the year ended September 30, 2005 consists of the following:
Beginning
Balance
Additions
Ending
Balance
Reductions
Current
Portion
General Revenue Bonds, Series 2004, with
interest at 4.12%, maturing November 15,
2034
$
59,350,000
General Revenue Bonds, Series 2003A, with
interest at fixed and variable rates ranging
from 1.8% to 3.45%, maturing November
15, 2033
51,550,000
-
900,000
50,650,000
1,150,000
General Revenue Bonds, Series 2003B, with
interest at 5.02%, maturing November 15,
2018
4,680,000
-
215,000
4,465,000
225,000
General Revenue Bonds, Series 2002, with
interest at 4.33%, maturing November 15,
2032
45,700,000
-
850,000
44,850,000
750,000
General Revenue Bonds, Series 2001,
Tranche 1, with interest at 4.85%, maturing
November 15, 2031
18,650,000
-
300,000
18,350,000
400,000
General Revenue Bonds, Series 2001,
Tranche 2, with interest at 4.27%, maturing
November 15, 2031
7,250,000
-
100,000
7,150,000
150,000
General Revenue and Refunding Bonds,
Series 1999, with interest ranging from
4.50% to 5.50%, maturing November 15,
2029
122,810,000
-
2,550,000
120,260,000
2,675,000
General Revenue Bonds, Series 1993, with
interest ranging from 5.30% to 5.65%,
maturing November 15, 2012
3,670,000
-
305,000
3,365,000
325,000
Various notes payable for equipment, land,
and additions at varying interest rates
maturing from 2006 through 2011
3,853,227
401,293
1,600,863
2,653,657
512,894
401,293
-
6,820,863
(167,960)
Gross long-term debt
Less: Unamortized bond discount
Total long-term debt
$
317,513,227
(4,311,876)
$ 313,201,351
34
$
-
401,293
$
$
-
6,652,903
$
59,350,000
$
311,093,657
(4,143,916)
$ 306,949,741
50,000
6,237,894
$
6,237,894
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 5 - Long-Term Debt (continued)
Long-term debt activity for the year ended September 30, 2004 consists of the following:
Beginning
Balance
Additions
Ending
Balance
Reductions
Current
Portion
General Revenue Bonds, Series 2004, with
interest at 4.12%, maturing November 15,
2034
$
-
General Revenue Bonds, Series 2003A, with
interest at fixed and variable rates ranging
from 1.8% to 3.45%, maturing November
15, 2033
-
51,550,000
-
51,550,000
900,000
General Revenue Bonds, Series 2003B, with
interest at 5.02%, maturing November 15,
2018
-
4,680,000
-
4,680,000
215,000
-
45,700,000
850,000
$
59,350,000
$
-
$
59,350,000
$
-
General Revenue Bonds, Series 2002, with
interest at 4.33%, maturing November 15,
2032
45,700,000
-
General Revenue Bonds, Series 2001,
Tranche 1, with interest at 4.85%, maturing
November 15, 2031
19,000,000
-
350,000
18,650,000
300,000
General Revenue Bonds, Series 2001,
Tranche 2, with interest at 4.27%, maturing
November 15, 2031
7,400,000
-
150,000
7,250,000
100,000
General Revenue and Refunding Bonds,
Series 1999, with interest ranging from
4.125% to 5.50%, maturing November 15,
2029
125,250,000
-
2,440,000
122,810,000
2,550,000
General Revenue Bonds, Series 1993, with
interest ranging from 5.20% to 5.65%,
maturing November 15, 2012
3,955,000
-
285,000
3,670,000
305,000
Various notes payable for equipment, land,
and additions at varying interest rates
maturing from 2005 through 2013
4,561,297
891,125
3,853,227
614,359
Gross long-term debt
Less: Unamortized bond discount
Total long-term debt
205,866,297
(3,868,157)
$ 201,998,140
183,055
115,763,055
(601,900)
$ 115,161,155
4,116,125
(158,181)
$
3,957,944
317,513,227
(4,311,876)
$ 313,201,351
5,834,359
$
5,834,359
The University’s General Revenue Bonds are secured by the unrestricted operating revenues of the
University. When possible, the University defeases prior debt issuances to reduce its borrowing
cost. The total amount of defeased bonds outstanding at September 30, 2005 and 2004 totaled
$2,275,000 and $2,525,000, respectively.
35
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 5 - Long-Term Debt (continued)
Total principal and interest maturities on all debt obligations as of September 30, 2005, are as
follows:
Years
2006
2007
2008
2009
2010
2011-2015
2016-2020
2021-2025
2026-2030
2030-2034
Principal
Interest
Total
$
6,237,894 $
7,538,572
7,260,752
7,815,429
7,841,010
45,520,000
51,790,000
61,650,000
78,090,000
37,350,000
10,543,479 $
10,121,827
10,160,930
9,671,713
9,606,685
42,368,898
33,660,711
23,519,936
11,042,436
1,433,836
16,781,373
17,660,399
17,421,682
17,487,142
17,447,695
87,888,898
85,450,711
85,169,936
89,132,436
38,783,836
$
311,093,657 $
162,130,451 $
473,224,108
Cash paid for interest was $14,263,375 in 2005 and $11,147,706 in 2004.
Interest Rate Swaps
Objective of the swaps - As a means to lower its borrowing costs and in order to protect against the
potential of rising interest rates, the University entered into five separate pay-fixed, receive-variable
interest rate swaps at a cost anticipated to be less than what the University would have paid to issue
fixed-rate debt.
Terms, fair values, and credit risk - The terms, fair values, and credit ratings of the outstanding
swaps as of September 30, 2005, were as follows.
Associated Bond Issue
Series 2001, Tranche 1
Series 2001, Tranche 2
Series 2002
Notional
Amounts
Effective Date
$ 19,000,000
7,400,000
45,700,000
12/04/01
12/15/02
12/06/02
Series 2003A
25,750,000
15-30 years
Series 2004
50,500,000
30 years
Fixed Rate
Paid
4.85%
4.27%
4.33%
Variable Rate
Received*
Fair Values
SAVRS
BMA
BMA
$ (2,647,253)
(666,307)
(4,559,591)
67% of LIBOR
/BMA
3.45%
67% of
4.12% LIBOR/BMA
(467,427)
(4,663,913)
$(13,004,491)
The notional amounts of the swaps match the principal amounts of the associated debt, for all of the
bond issues, except the Series 2003A and Series 2004 bonds.
36
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 5 - Long-Term Debt (continued)
* SAVRS Interest rate determined every 35 days via a Dutch auction
LIBOR – London Interbank Offered Rate
BMA – Bond Market Association Index
Because interest rates have declined, all swaps had a negative fair value as of September 30, 2005.
The negative fair values may be countered by reductions in total interest payments required under
the variable-rate bonds, creating lower synthetic interest rates. The fair values were estimated by
using the proprietary pricing model of a pricing service.
Credit risk - As of September 30, 2005, the University was not exposed to credit risk because the
swaps had a negative fair value. However, should interest rates change and the fair value of the
swap becomes positive, the University would be exposed to credit risk in the amount of the
derivative’s fair value. All of the swaps are held by one counterparty. The swap counterparty was
rated “A+” by Fitch Ratings, “A” by Standard & Poor’s, and “A1” by Moody’s Investors Service as of
September 30, 2005. To mitigate the potential for credit risk, if the counterparty’s credit quality
falls below “A”, the fair value of the swap will be fully collateralized by the counterparty with U.S.
government securities. Collateral would be posted with a third-party custodian.
Basis risk - As noted above, the swap exposes the University to basis risk should the relationship
between LIBOR and BMA converge, changing the synthetic rate on the bonds. If a change occurs
that results in the rates moving to convergence, the expected cost savings may not be realized.
Termination risk - The swap termination dates are November 2031 for the Series 2001 Tranche 1
and 2 bonds, November 2032 for the Series 2002 bonds, November 2033 for Series 2003A bonds
and November 2034 for the Series 2004 bonds. The derivative contract uses the International Swap
Dealers Association Master Agreement, which includes standard termination events, such as failure
to pay and bankruptcy. The Schedule to the Master Agreement includes an “additional termination
event.” That is, the swap may be terminated by the University if the counterparty’s credit quality
rating falls below “A+” as issued by Fitch Ratings, or “A” as issued by Standard & Poor’s, or “A2” as
issued by Moody’s Investors Service.
The University or the counterparty may terminate the swap if the other party fails to perform under
the terms of the contract. If the swap is terminated, the variable-rate bond would no longer carry a
synthetic interest rate. Also, if at the time of termination the swap has a negative fair value, the
University would be liable to the counterparty for a payment equal to the swap’s fair value.
37
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 5 - Long-Term Debt (continued)
Interest Rate Swaps (continued)
Swap payments and associated debt - As of September 30, 2005, debt service requirements of the
variable-rate debt and net swap payments, assuming current interest rates remain the same, for
their term were as follows.
Years
2006
2007
2008
2009
2010
2011-2015
2016-2020
2021-2025
2026-2030
2030-2035
Total
$
Principal
Interest
2,500,000 $
3,800,000
3,450,000
3,950,000
3,800,000
23,050,000
28,150,000
33,100,000
41,200,000
37,350,000
180,350,000 $
3,985,503 $
3,723,647
3,938,061
3,629,464
3,762,645
16,581,277
13,707,862
10,258,999
6,121,924
1,433,836
67,143,218 $
Interest Rate
Swaps, Net
3,104,255 $
3,003,983
2,933,991
2,812,838
2,804,325
12,764,868
10,586,469
8,071,720
4,775,875
1,096,931
51,955,255 $
Total
9,589,758
10,527,630
10,322,052
10,392,302
10,366,970
52,396,145
52,444,331
51,430,719
52,097,799
39,880,767
299,448,473
As rates vary, variable-rate bond interest payments and net payments will vary.
Subsequent event - On October 25, 2005, the University entered into forward starting swaps with a
total notional amount of $107,500,000. These swaps will be effective as of November 15, 2009 and
terminate November 15, 2029. The fixed interest rate to be paid will be 3.579% and the variable
interest rate to be received will be 67% of LIBOR. The purpose of these swap agreements is to
refinance the Series 1999 bonds that are callable in November 2009. This forward starting swap
will allow the University to reduce the interest expense currently associated with these bonds.
Note 6 - Defined Contribution Retirement Plan
The University provides pension benefits for substantially all of its full-time employees through a
defined contribution plan. In a defined contribution plan, benefits depend solely on amounts
contributed to the plan plus investment earnings. Employees are eligible to participate after they
reach 26 years of age and have two years of service. For eligible employees, the University will
contribute 10% of an employee’s salary each pay period provided that the employee contributes
5% of his/her salary. The University’s contributions for each employee are fully vested immediately.
University contributions to the plan for the years ended September 30, 2005 and 2004 were
$24,664,000 and $23,800,000, respectively.
38
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 7 - Commitments
In connection with the University’s ongoing construction program, approximately $37,922,000 was
committed at September 30, 2005. Included in this amount is approximately $16,500,000 related to
the Scott Hall Laboratory renovations, $6,500,000 related to the Chemistry Building Laboratory
renovations, and various other construction projects. These commitments will be funded through a
combination of sources including external long-term financing, gifts, investment income, and various
other University resources.
Note 8 - Contingencies
Insurance Program
In conjunction with the conduct of its routine operations, the University is exposed to various risks
of loss and legal actions. The University and ten other state-supported universities participate in the
Michigan Universities Self-Insurance Corporation (“MUSIC”), which provides comprehensive
general liability, errors and omissions, property and vehicle liability, and excess liability insurance.
Loss coverages are structured on a three-layer basis with each member retaining a portion of its
losses, MUSIC covering the second layer and commercial carriers covering the third.
Comprehensive general liability coverage is provided on an occurrence basis, errors and omissions
coverage is provided on a claims made basis and property coverage is provided on a blanket basis.
Each university is responsible for its regular anticipated losses, determined actuarially, for both
general liability and errors and omissions. The aggregate retention amounts for each member are
actuarially determined annually. MUSIC provides coverage for claims in excess of these retentions.
All of the participating universities are subject to additional assessments, if the obligations and
expenses (claims) of MUSIC exceed the combined periodic payments and accumulated operational
reserves for any given year. The maximum possible additional assessment for the University for the
year ended September 30, 2005 is approximately $1.8 million. The University has not been
subjected to additional assessments since the formation of MUSIC in 1987.
The University is also self-insured for certain employee benefits. Claims expenditures and liabilities
are recorded when it is probable that a significant loss has occurred and the amount of that loss can
be reasonably estimated. This would include an estimate of any significant claims that have been
incurred but not reported. The University’s recorded reserves for its self-insured workers’
compensation, dental and certain medical insurance programs at September 30, 2005 and 2004
totaled approximately $3,800,000 and $4,600,000, respectively. Specific excess (umbrella) coverage
has been purchased by the University for its self-insured workers’ compensation and medical
insurance programs.
39
Wayne State University
Notes to Financial Statements
September 30, 2005 and 2004
Note 8 - Contingencies (continued)
Pending Litigation
The University is named as a defendant in certain civil actions. The University is of the opinion that
the resulting disposition of these actions will not have a material effect on the combined financial
statements.
Loan Guarantees
The University has guaranteed an operating line of credit of $500,000 and a construction loan of $10
million for Research and Technology Park in the City of Detroit, Inc., a 501(c)(3) organization. As of
September 30, 2005, funds drawn against the construction loan totaled $8 million.
Note 9 - Natural Classification of Expenses
Operating expenses by natural classification for the years ended September 30, 2005 and 2004 are
summarized as follows:
2005
Compensation and benefits
Supplies and services
Depreciation
Scholarship and fellowships
2004
$ 478,584,820 $ 465,651,342
175,327,988
179,138,567
41,663,751
43,768,116
625,151
1,321,317
$ 696,897,876 $ 689,183,175
Total operating expenses
40
Additional Information
41
Report on Supplemental Information
Board of Governors
Wayne State University
We have audited the financial statements of Wayne State University for the years ended September 30,
2005 and 2004. Our audits were made for the purpose of forming an opinion on the financial statements
taken as a whole. The additional information, as listed in the table of contents, is presented for purposes
of additional analysis and is not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
December 9, 2005
42
Wayne State University
Combining Balance Sheet
September 30, 2005 (with comparative totals for September 30, 2004)
2005
General
Fund
ASSETS
Current assets
Cash and temporary investments
Current receivables, net
Inventories
Prepaid expenses and deposits
Total current assets
$
Investments
Noncurrent receivables, net
Unamortized bond issue costs
Capital assets, net
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
Deferred income
Deposits
Short-term loans
Current portion of long-term debt
Total current liabilities
$
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted
Nonexpendable
Expendable
Unrestricted
189,059,814
30,227,097 $
4,687,277
8,975
34,923,349
40,427,085
$
11,093,649
Expendable
Restricted
Fund
114,340 $
312,468
426,808
4,363
-
6,113,526 $
437,925
6,551,451
1,558,526 $
4,648,768
619,744
6,827,038
4,874,403
-
317,330
-
391,856
-
431,171
12,718,297 $
44,038,815
15,938
56,773,050
182,909 $
182,909
43,589
-
57,912,377
180,872,225 $
96,701,021
1,402,027
13,301,397
292,276,670
298,924,096
39,972,370 $
4,899,277
16,762
44,888,409
42,182,490
6,642,281
1,822,328
701,062,241
6,647,426
$
Student
Loan
Fund
Plant
Fund
6,647,426
-
1,139,327
$
2004
Total
Current
Funds
1,139,327
-
4,363
$
35,688,126 $
82,264,094
3,504,386
121,456,606
12,157,212 $
14,307,982
26,465,194
55,700,299 $
101,658,769
4,124,130
161,483,198
585,691
-
6,212,869
-
796,597,749
8,924,109 $
21,515,295
30,439,404
27,230,349
-
751,709,340
$
Endowment
& Similar
Funds
16,546,409 $
277,775
6,237,894
23,062,078
57,669,753
2,095,824 $
470,859
2,566,683
192,169,285
-
27,230,349
$
194,735,968
217,648 $
217,648
300,711,847
25,102,840
-
355,450
-
317,330
391,856
43,589
585,691
6,212,869
300,711,847
25,102,840
355,450
6,868,781
7,218,894
226,498
27,050,885
167,696,067
323,773,925
46,336,619
573,098
-
-
$
40,427,085
$
Total General Fund unrestricted net assets
$
11,093,649
-
204,673
3,874,755
$
(A) General Fund unrestricted net assets are appropriated or allocated as follows (in thousands):
2005
Contractually committed, encumbrances
Appropriated in subsequent year budget
Rainy Day Fund
Committed for research
Academic unit funds carried forward
Operating unit funds carried forward
Funds available for allocation in subsequent years
-
3,874,755
33,558,304
62,728,805
189,059,814
-
33,558,304
204,673
$
431,171
-
30,861,492
30,861,492
$
57,912,377
62,729
$
11,500
5,700
7,600
17,200
6,500
12,400
495
61,395
43
298,924,096
-
1,304,089
44,261,767
131,228,029
$
2004
7,800 $
5,700
7,900
19,000
7,800
14,100
429
427,257,968
30,861,492
100,366,537
796,597,749
85,746,486
102,271,262
6,145,122
11,333,134
$
57,669,753
194,162,870
$
194,735,968
12,775,828
243,552,859 $
124,411,818
1,402,027
13,580,290
382,946,994
227,468,535
121,064,397
1,512,904
10,692,372
360,738,208
234,351,775
40,520,056
1,822,328
701,062,241
279,907,413
30,358,072
1,879,215
636,305,393
1,309,188,301
83,739,718 $
101,936,544
5,624,596
21,233,779
6,237,894
218,772,531
78,277,061
89,237,055
6,981,239
20,398,778
5,834,359
200,728,492
-
25,102,840
6,568,319
300,711,847
24,093,358
5,091,702
307,366,992
-
332,383,006
336,552,052
551,155,537
537,280,544
-
427,257,968
422,498,303
-
96,493,014
134,436,843
151,360,032
90,637,745
115,588,375
143,183,334
11,275,362 $
1,500,466
12,775,828
12,775,828
1,360,703,394
948,450,093
$
$
Combined
Fund
Totals
977,756,400
$
12,775,828
-
10,746,528
586,606
472,823,824
$
$
$
21,233,779
21,233,779
4,874,403
11,688,331 $
825,366
262,131
12,775,828
-
192,169,285
$
Combined
Fund
Totals
Agency
Fund
126,331,009
62,728,805
$
-
5,503,736
$
Independent
Operations
Fund
6,627,607 $
3,952,313
394,404
119,325
11,093,649
5,503,736
-
-
Noncurrent liabilities
Federal portion of student loan funds
Accrued employee benefits
Long-term debt
Total net assets
Total liabilities and net assets
131,184,884 $
43,710,148
1,007,623
13,157,159
189,059,814
-
$
Auxiliary
Activities
Fund
Designated
Fund
809,547,857
$
1,360,703,394
771,907,757
$
1,309,188,301
Wayne State University
Combining Statement of Revenues, Expenses, Transfers
and Changes in Net Assets
Year Ended September 30, 2005
(with comparative totals for the year ended September 30, 2004)
Year Ended September 30
2004
2005
General
Fund
Operating Revenues
Student tuition and fees
Less: Scholarship allowances
Net student tuition and fees
Federal grants and contracts
State and local grants and contracts
Nongovernmental grants and contracts
Departmental activities
Auxiliary enterprises (net of scholarship allowances
of $1,445,882 in 2005 and $1,750,707 in 2004)
Recovery of indirect costs of sponsored programs
Other operating revenues
Total operating revenues
Operating Expenses
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships
Auxiliary enterprises
Depreciation expense
Capital additions, net
Transfers (in) out:
Debt service
Loan matching
Plant improvement and extension
Other
Total operating expenses
Operating income (loss)
$
177,658,107
177,658,107
9,514,537
37,327,025
1,247,133
Auxiliary
Activities
Fund
Designated
Fund
$
64,034,371
11,345,223
-
$
2,247,917 $
2,247,917
23,778,269
-
Independent
Operations
Fund
1,022,075
-
Expendable
Restricted
Fund
$
Sub-total
Current
Funds
-
141,863,354
28,703,300
34,437,820
(37,327,025)
-
$
Student
Loan
Fund
Plant
Fund
Endowment
& Similar
Funds
179,906,024 $
-
225,081 $
-
-
179,906,024
141,863,354
28,703,300
98,472,191
21,881,835
225,081
471,840
-
-
23,778,269
1,247,133
-
-
167,943,273
(46,446,364)
-
(49,394,670)
-
130,736,435
142,335,194
28,703,300
98,472,191
21,881,835
121,496,909
134,839,039
22,258,139
100,704,456
16,944,498
165,679
-
(1,445,882)
-
22,332,387
1,412,812
20,464,946
2,092,947
165,679
-
(50,840,552)
445,874,154
418,800,934
-
(2,192,020)
(7,361,000)
(123,824)
(4,846,486)
(114,568)
(125,215)
(19,185)
(50,840,552)
(14,262)
14,796,560
238,343,759
148,601,703
51,572,052
56,722,153
30,226,536
52,877,457
58,178,069
1,321,317
17,391,079
41,663,751
-
233,512,055
151,426,342
46,298,270
58,588,464
28,570,519
50,757,547
58,934,279
625,151
16,702,432
43,768,116
-
26,026,186
1,022,075
167,677,449
495,852,106
176,919,880
26,578,613
1,662,117
60,151,283
28,650,664
50,132,183
51,317,574
25,351,592
-
48,413,076
2,951,666
21,554,378
361,649
1,262,207
2,779,015
25,090
121,301
-
17,405,341
-
3,714,522
-
15,202,823
126,432,424
24,764,859
1,055,707
428,233
91,474
948,911
26,688,976
-
240,535,779
155,962,703
51,695,876
61,568,639
30,341,104
53,002,672
52,291,575
52,161,869
17,405,341
-
5,905,679
41,663,751
(14,796,560)
10,014,043
120,659
14,733,686
168,108
878,712
1,061,996
538,455
6,534,784
2,681,351
-
(2,998)
464,690
17,427,539
120,659
18,474,035
1,171,253
(17,427,539)
(18,474,035)
-
(120,659)
2,171
(1,173,424)
445,800,402
79,947,545
26,621,476
(220,053,600)
(4,567,951)
(595,290)
-
3,714,522
196,075,099
752,159,044
(3,128,704)
(118,488)
(1,173,424)
(2,692,447)
(28,397,650)
(256,306,938)
3,825,625
284,167
1,173,424
44
Combined
Total
180,131,105 $
(49,394,670)
75,379,594
$
Combined
Total
$
(49,394,670)
225,746,802
-
696,921
$
Adjustment
(50,840,552)
-
-
-
696,897,876
689,183,175
(251,023,722)
(270,382,241)
Wayne State University
Combining Statement of Revenues, Expenses, Transfers
and Changes in Net Assets (Continued)
Year Ended September 30, 2005
(with comparative totals for the year ended September 30, 2004)
Year Ended September 30
2004
2005
General
Fund
Nonoperating Revenues (Expenses)
State operating appropriations
Gifts
Investment income:
Endowment and similar funds
Other
Interest on capital asset related debt
$
Other
Net nonoperating revenues (expenses)
Income (loss) before other revenues and
expenses
Other Revenues (Expenses)
State capital appropriations
Capital gifts
Loss on capital assets retired
Private gifts for endowment purposes
Net other revenues
Designated
Fund
217,366,044
-
$
$
$
15,097,633
Independent
Operations
Fund
-
$
Expendable
Restricted
Fund
$
1,507,384
Sub-total
Current
Funds
5,870,056 $
18,917,831
Student
Loan
Fund
Plant
Fund
223,236,100 $
35,522,848
-
$
Endowment
& Similar
Funds
$
8,561
Combined
Total
Adjustment
$
1,065,741
-
$
Combined
Total
223,236,100 $
36,597,150
216,865,900
29,353,815
29,489,912
(11,849,792)
(946,227)
23,648,868
(10,583,858)
2,281,781
406,376
3,615,005
-
98,549
518,884
-
93,650
-
141
(172)
-
6,831,208
1,661,132
-
7,336,274
5,888,499
-
31,082
2,621,187
(11,849,792)
(323,943)
28,974
158,215
(222,914)
(7,396,330)
20,822,011
(399,370)
-
221,387,425
15,715,066
93,650
1,507,353
33,280,227
271,983,721
(9,521,466)
(27,164)
14,092,052
-
276,527,143
1,333,825
11,147,115
(501,640)
(1,185,094)
4,882,577
15,676,783
(5,695,841)
257,003
15,265,476
-
25,503,421
(8,815,735)
-
2,455,347
6,921,895
(1,839,735)
1,444,133
2,224,500
(3,361,255)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,333,825
61,394,980
Increase (decrease) in net assets
Net assets - Beginning of year
Net assets - End of year
Auxiliary
Activities
Fund
62,728,805
11,147,115
22,411,189
$
33,558,304
(501,640)
4,376,395
$
3,874,755
(1,185,094)
1,389,767
$
204,673
4,882,577
25,978,915
$
30,861,492
45
2,455,347
6,921,895
(1,839,735)
7,537,507
15,676,783
115,551,246
$
131,228,029
-
1,841,666
470,982,158
$
472,823,824
-
-
4,599,172
-
4,599,172
5,281,172
-
4,599,172
-
12,136,679
5,588,550
19,864,648
174,298,222
-
37,640,100
771,907,757
257,003
11,076,131
$
261,566,506
11,333,134
$
194,162,870
$
-
$
809,547,857
(3,227,185)
775,134,942
$
771,907,757
Wayne State University
Combining Balance Sheet
September 30, 2004
General
Fund
ASSETS
Current assets
Cash and temporary investments
Current receivables, net
Inventories
$
Prepaid expenses and deposits
Total current assets
Investments
Noncurrent receivables, net
Unamortized bond issue costs
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
Deferred income
Deposits
Short-term loans
$
$
Current portion of long-term debt
Total current liabilities
Noncurrent liabilities
Federal portion of student loan funds
Accrued employee benefits
Long-term debt
Total noncurrent liabilities
Total liabilities
Independent
Operations
Fund
Expendable
Restricted
Fund
Total
Current
Funds
21,974,985 $
6,067,644
8,975
6,066,805 $
5,801,461
519,147
123,890
(386,806) $
1,958,719
-
15,506,760 $
41,013,284
15,938
163,320,729 $
92,694,117
1,512,904
10,313,480
169,170,428
28,051,604
12,511,303
1,571,913
56,535,982
5,450
-
184,231
-
169,170,428
701,767
-
$
5,450
1,577,363
5,802,753 $
337,537
-
4,134,311 $
2,807,499
730,423
-
163,990
-
104,024,060
6,140,290
7,672,233
163,990
30,089,157
3,751,388
-
201,892
-
462,675
-
23,606
-
652,141
-
$
30,912,732 $
68,000,561
5,110,767
-
701,767
28,753,371
$
12,511,303
$
$
184,231
56,720,213
$
12,275,519 $
17,813,638
-
Student
Loan
Fund
Plant
Fund
120,158,985 $
37,853,009
993,757
10,164,677
-
Capital assets, net
Auxiliary
Activities
Fund
Designated
Fund
Endowment
& Similar
Funds
45,771,351 $
6,667,273
116,762
6,777,006 $
20,533,120
-
267,841,230
52,555,386
27,310,126
1,086,075
891,448
-
106,409,066
1,208,483
1,879,215
636,305,393
28,258,141
-
173,498,347
-
891,448
268,732,678
173,498,347
174,584,422
13,896,214 $
277,820
5,834,359
$
20,398,778
-
286,200
-
148,089,730
20,008,393
20,398,778
286,200
5,091,702
-
307,366,992
24,093,358
-
53,289,305 $
88,959,235
5,841,190
-
745,802,157
798,357,543
$
28,258,141
55,568,267
722,991
363,084
-
$
$
3,751,388
201,892
462,675
23,606
652,141
5,091,702
307,366,992
24,093,358
107,775,448
6,342,182
8,134,908
187,596
30,741,298
153,181,432
327,375,385
44,492,136
Combined
Fund
Totals
Agency
Fund
$
10,876,458 $
806,803
262,130
11,945,391
360,738,208
$
$
11,945,391
279,907,413
30,358,072
1,879,215
636,305,393
$
948,450,093
1,309,188,301
10,805,342 $
1,140,049
-
78,277,061
89,237,055
6,981,239
20,398,778
5,834,359
11,945,391
286,200
227,468,535
121,064,397
1,512,904
10,692,372
200,728,492
-
24,093,358
5,091,702
307,366,992
-
336,552,052
11,945,391
537,280,544
NET ASSETS
Invested in capital assets, net of related debt
Restricted
Nonexpendable
Expendable
-
Unrestricted
$
169,170,428
-
22,411,189
$
28,753,371
-
4,376,395
22,411,189
61,394,980
Total net assets
Total liabilities and net assets
-
61,394,980
4,376,395
$
12,511,303
-
1,389,767
1,389,767
$
1,577,363
56,720,213
$
11,500
5,700
7,600
17,200
6,500
12,400
495
$
61,395
Funds available for allocation in subsequent years
Total General Fund unrestricted net assets
46
422,498,303
25,978,915
89,572,331
25,978,915
$
(A) General Fund unrestricted net assets are appropriated or allocated as follows (in thousands):
2004
Contractually committed, encumbrances
Appropriated in subsequent year budget
Rainy Day Fund
Committed for research
Academic unit funds carried forward
Operating unit funds carried forward
-
25,978,915
-
115,551,246
$
268,732,678
-
45,970
1,049,932
47,387,953
470,982,158
$
798,357,543
-
10,457,885
618,246
80,133,890
88,559,528
5,604,804
11,076,131
$
55,568,267
174,298,222
$
174,584,422
-
422,498,303
-
90,637,745
115,588,375
143,183,334
$
11,945,391
771,907,757
$
1,309,188,301
Wayne State University
Combining Statement of Revenues, Expenses, Transfers
and Changes in Net Assets
Year Ended September 30, 2004
General
Fund
Operating Revenues
Student tuition and fees
Less: Scholarship allowances
Net student tuition and fees
Federal grants and contracts
State and local grants and contracts
Nongovernmental grants and contracts
Departmental activities
Auxiliary enterprises (net of scholarship allowances
of $1,750,707)
Recovery of indirect costs of sponsored programs
Other operating revenues
Total operating revenues
Operating Expenses
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships
Auxiliary enterprises
Depreciation expense
Capital additions, net
Transfers (in) out:
Debt service
Loan matching
Plant improvement and extension
Other
Total operating expenses
Operating income (loss)
$
Auxiliary
Activities
Fund
Designated
Fund
165,418,781 $
165,418,781
7,083,579
34,472,066
1,950,111
59,831,200
8,435,937
-
$
Independent
Operations
Fund
2,302,096
2,302,096
22,215,653
-
$
Expendable
Restricted
Fund
-
$
-
Sub-total
Current
Funds
-
1,424,982
-
$
167,720,877 $
-
132,901,907
20,758,139
40,873,256
-
167,720,877
132,901,907
20,758,139
100,704,456
16,944,498
(34,472,066)
22,215,653
-
-
Student
Loan
Fund
Plant
Fund
1,950,111
222,396
222,396
1,937,132
1,500,000
-
208,924,537
68,267,137
24,517,749
1,424,982
160,061,236
463,195,641
3,659,528
168,284,814
24,378,267
1,834,693
57,331,305
27,531,004
48,140,235
49,354,466
24,790,947
-
45,761,542
3,686,687
18,762,326
4,330,072
515,358
2,628,555
16,868
-
16,782,417
-
2,870,803
-
21,156,096
128,246,774
22,857,826
1,295,738
538,134
115,279
867,190
24,014,407
-
235,202,452
156,311,728
46,325,648
62,957,115
28,584,496
50,884,069
50,221,656
48,822,222
16,782,417
-
8,750,859
43,768,116
(11,230,532)
7,327,251
173,382
8,289,353
10,512,150
6,073,991
4,804,909
13,401,242
173,382
23,581,717
(13,401,242)
(23,581,717)
-
-
(24,695)
144,737
341,709
2,039,498
2,525,944
417,580,454
86,555,267
27,661,317
2,870,803
-
201,106,247
735,774,088
(208,655,917)
(18,288,130)
(3,143,568)
(1,445,821)
(41,045,011)
(272,578,447)
47
4,305,484
(645,956)
$
Endowment
& Similar
Funds
-
$
Combined
Total
Adjustment
-
$
-
$
167,943,273
-
-
(46,446,364)
(46,446,364)
-
-
(46,446,364)
-
121,496,909
134,839,039
22,258,139
100,704,456
16,944,498
-
-
(1,750,707)
-
20,464,946
-
142,836
-
142,836
-
(48,197,071)
418,800,934
-
(1,690,397)
(4,885,386)
(27,378)
(4,368,651)
(13,977)
(126,522)
(38,236)
(48,197,071)
(79,985)
11,230,532
233,512,055
151,426,342
46,298,270
58,588,464
28,570,519
50,757,547
58,934,279
625,151
16,702,432
43,768,116
-
(173,382)
-
-
35,828
(2,561,772)
(137,554)
(2,561,772)
280,390
2,561,772
-
(48,197,071)
-
2,092,947
689,183,175
(270,382,241)
Wayne State University
Combining Statement of Revenues, Expenses, Transfers
and Changes in Net Assets (Continued)
Year Ended September 30, 2004
General
Fund
Nonoperating Revenues (Expenses)
State operating appropriations
Gifts
Investment income:
Endowment and similar funds
Other
Interest on capital asset related debt
$
Other
Net nonoperating revenues (expenses)
Income (loss) before other revenues and expenses
Private gifts for endowment purposes
Net other revenues
Increase (decrease) in net assets
$
-
$
-
Expendable
Restricted
Fund
Sub-total
Current
Funds
$
2,123,861
10,977,326
18,433,853
$
Student
Loan
Fund
Plant
Fund
216,865,900 $
29,209,635
-
$
Endowment
& Similar
Funds
8,515
$
Combined
Total
Adjustment
135,665
$
-
$
216,865,900
29,353,815
103,240
145,999
-
122,745
-
1,625
(118)
-
6,859,509
1,790,011
-
6,964,374
4,144,692
-
32,560
1,193,093
(10,583,858)
2,495,325
29,941
239,167
(195,522)
(7,026,875)
18,071,916
(18,022)
-
23,648,868
(10,583,858)
2,281,781
207,974,629
8,901,160
122,745
2,125,368
38,060,699
257,184,601
(6,862,880)
82,101
11,162,684
-
261,566,506
(2,984,312)
(15,393,846)
(7,508,836)
362,491
13,724,456
-
(8,815,735)
-
1,444,133
2,224,500
(3,361,255)
5,281,172
(9,386,970)
(3,020,823)
679,547
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9,386,970)
62,076,268
$
8,651,921
Independent
Operations
Fund
2,086,055
-
(681,288)
Net assets - Beginning of year
Net assets - End of year
205,888,574 $
-
(681,288)
Other Revenues (Expenses)
State capital appropriations
Capital gifts
Loss on capital assets retired
Auxiliary
Activities
Fund
Designated
Fund
61,394,980
(3,020,823)
31,798,159
$
22,411,189
679,547
7,397,218
$
4,376,395
(2,984,312)
710,220
$
1,389,767
48
25,978,915
(7,201,458)
130,945,092
$
115,551,246
-
307,378
(15,393,846)
28,963,227
$
1,444,133
2,224,500
(3,361,255)
470,982,158
-
5,281,172
-
-
5,281,172
-
5,588,550
19,005,628
-
(3,227,185)
362,491
478,183,616
$
-
10,713,640
$
11,076,131
155,292,594
$
174,298,222
$
-
775,134,942
$
771,907,757